Cedar Creek Partners, an investment management company, released its fourth quarter 2024 investor letter. A copy of the letter can be downloaded here. In 2024, a few significant tech stocks and the NASDAQ remained at the top of the stock markets. The NASDAQ saw a gain of 28.6% for the year, while the S&P 500 (SPY) increased by 24.9%. Other monitored indices also delivered double-digit returns, with Cedar Creek achieving a 5.2% rise for the year, after accounting for fees and expenses. In addition, you can check the fund’s top 5 holdings to find out its best picks for 2024.
In its fourth quarter 2024 investor letter, Cedar Creek Partners emphasized stocks such as Western Capital Resources, Inc. (OTC:WCRS). Western Capital Resources, Inc. (OTC:WCRS) is a US-based retail company. The one-month return of Western Capital Resources, Inc. (OTC:WCRS) was 0.00%, and its shares gained 95.65% of their value over the last 52 weeks On February 26, 2025, Western Capital Resources, Inc. (OTC:WCRS) stock closed at $9.00 per share with a market capitalization of $81.972 million.
Cedar Creek Partners stated the following regarding Western Capital Resources, Inc. (OTC:WCRS) in its Q4 2024 investor letter:
“We also re-entered two old favorites Pardee Resources (otc: PDER) and Western Capital Resources, Inc. (OTC:WCRS). Western Capital is a holding company whose primary holdings include 270 Cricket wireless stores, Jackson & Perkins, a retailer of roses, plants and seed, and three ice rinks in Michigan. It has significantly reduced its share count over the last year and a half. By usings its cash to buy 255,564 shares from individuals at $4.58 per share average, and, more importantly, by purchasing interests in two WCR Investment LLC’s which own approximately 63% of the company’s shares it has effectively reduced its share count from 9.1 million to 6.0 million.
Earnings for WCRS in 2022 were $10.2 million and in 2023 were $10.6 million. Reported earnings are understated due to intangible amortization which was $2.0 million in 2022 and $2.4 million in 2023. Thus, cash earnings were $12.2 million and $13.0 million in 2022 and 2023, respectively. In the first half of 2024, which is their stronger half, earnings were $7.2 million, or $1.20 per share. Cash earnings were $8.4 million, or $1.40 per share. Book value as of June 30, 2024, was $90.4 million, or $15.07 per share. Net cash was $39.9 million, or $6.65 per share. The company continues to look for acquisitions at 4-6 times EBITDA. Last trade on the expert market was $9 per share. We were the happy buyers. Where else are we going to be able to buy shares in a company for one times earnings, net of cash, in company that has reduced its share count by nearly 35% in the last eighteen months?”
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Western Capital Resources, Inc. (OTC:WCRS) is not on our list of 30 Most Popular Stocks Among Hedge Funds. While we acknowledge the potential of Western Capital Resources, Inc. (OTC:WCRS) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is as promising as NVIDIA but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
In addition, please check out our hedge fund investor letters Q4 2024 page for more investor letters from hedge funds and other leading investors.
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Disclosure: None. This article is originally published at Insider Monkey.